Emergent Research

EMERGENT RESEARCH is focused on better understanding the small business sector of the US and global economy.

Authors

The authors are Steve King and Carolyn Ockels. Steve and Carolyn are partners at Emergent Research and Senior Fellows at the Society for New Communications Research. Carolyn is leading the coworking study and Steve is a member of the project team.

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Disclosure Policy

Emergent Research works with corporate, government and non-profit clients. When we reference organizations that have provided us funding in the last year we will note it.
If we mention a product or service that we received for free or other considerations, we will note it.

Reuters has an article on the wider appeal of coworking due to the recession. We continue to see coworking growing through the downturn, although probably not as robustly as it would have if the economy stayed strong.

In past recessions self-employment declined during the early stages of the recession and then picked up in the middle and later stages. This recession appears to be following the same pattern. And with the recession over 1 year old self-employment probably started picking up late last year and will continue to grow this year.

The new self-employed will need places to work and network and this bodes well for coworking.

February 24, 2009

As the graph below from the NY Times indicates, the share of jobs held by women has been growing steadily over the last few decades. This has been due to increased workforce participation rates by women.

There are a number of good articles on the package and how it impacts small business:

1. SBA Advocacy Chief Economist Chad Moutray covers the small business impact of the stimulus package at a high level on the SBA's Small Business Watchdog blog.

It covers both specific small business measures and provides a good overview of the infrastructure spend. If you are interested in small business and just want to read one article on this topic, read this one.

Small Business Trends – A variety of distinct voices that help small businesses get on track for success. Not only are there great conversations, but Anita Campbell is more than helpful when responding to questions/comments.

How To Change The World – A practical guide to entrepreneurship and marketing. Not only is Guy Kawasaki’s blog interesting, but by following him on other social networks, you are sure to run across useful and entertaining information.

SmallBizTechnology.com – With so many new technologies emerging every day, SmallBizTechnology helps small businesses provide information and strategies to help your business grow.

American Express OPEN Blog – A compilation of small business experts writing on topics including Finance, Marketing, Innovation, Leadership, and Management. Keep your eyes open because you will definitely run across authors from the other blogs in this list.

Needless to say, we are thrilled to be in the same list with these great blogs. Thanks.

February 20, 2009

Self-employment week ends not a moment too soon with a look at agricultural self-employment.

Agricultural employment is the U.S. has fallen consistently for decades. For example, in 1948 there were over 7 million American agricultural workers. Today, despite our population and workforce being over 2.5 times larger than in 1948, only about 2.2 million people are classified as agricultural workers.

Automation, productivity increases and food imports have accounted for the long term decline in farm employment.

But as the chart below shows, agricultural self-employment may be bottoming out.

Increased consumer interest in food safety, organic food and buying fresh and local food has led to a growing number of small farms. Related to this, the number of farmers' markets has grown from under 400 in 1970 to over 4500 today.

We've posted extensively on the trends related to the growth of small farms and local food. Based on these trends, our expectation is agricultural self-employment will increase substantially over the ne next decade.

February 19, 2009

Self-employment week continues with a look at the differences between government definitions of self-employment and nonemployer businesses. And yes, it doesn't get much more exciting than this:).

Let's start with nonemployer businesses (we call them Personal Businesses). According to the U.S. Census Bureau:

"A nonemployer business is one that has no paid employees, has annual business receipts of $1,000 or more ($1 or more in the construction industries), and is subject to federal income taxes. Most nonemployers are self-employed individuals operating very small unincorporated businesses, which may or may not be the owner’s principal source of income."

The data comes mostly from tax returns filed with the IRS. So as long as we aren't looking at cabinet nominees or those buying and selling senate seats, it is probably pretty accurate.

Self-employment data comes from the Current Population Survey (CPS), which is a monthly survey of about 50,000 U.S. households. The CPS has been around over 50 years and is the primary source of information on the U.S. labor force. The widely followed monthly unemployment rate, for example, is derived from CPS data.

According to the CPS, about 16 million people were self-employed in 2007. This is total self-employment and includes unincorporated, incorporated and agricultural self-employed. Alert readers of the prior two posts in this series will immediately recognize why we need this qualifier.

So in 2007 the U.S. had 21 million personal (nonemployer) businesses and 16 million self-employed.

Because the data collection methods are so different, one should not try to draw a lot of conclusions from the combination of the two datasets.

February 18, 2009

Incorporated, non-agricultural self-employment in the U.S. grew from roughly 4.1 million to 5.6 million between 1998 and 2008. Unincorporated non-agricultural self-employment remained relatively flat, going from roughly 9.0 million in 1998 to 9.2 million in 2008.

Non-agricultural employment is often used when looking at U.S. self-employment trends. This is because it excludes the long term, steady decline in the number of small farms and agricultural employment.

As the chart below shows, the shifts in self-employment have led to a steady increase in the percentage of incorporated self-employed relative to the total number of self-employed.

Total self-employment during this period grew from roughly 13 million to 14.8 million (differences due to rounding). As our post from yesterday shows, the percentage of self-employed compared to total employment has remained somewhat stable over the last decade.

The growth of incorporated self-employed comes from both new small businesses as well as unincorporated self-employed choosing to incorporate.

There are many reasons unincorporated self-employed choose to incorporate. Tax benefits, liability protection and customer expectations are all good reasons for the self-employed to create a corporate entity.

February 17, 2009

Self-employment is an important source of jobs for the U.S. economy. And as the chart below shows, the last decade has seen little change in the percentage of the workforce that is self-employed. Self-employment has remained relatively stable - hovering around 10% of the non-agricultural workforce.

The chart data is from the Current Population Survey (CPS), which for historical reasons classifies the self-employed into two categories.

Unincorporated self-employed refers to people who identify themselves as self-employed but don't have a corporate entity. The percentage of unincorporated self-employment has trended down over the last decade, going from 7% in 1998 to 6.44% in 2008.

The second group is the incorporated self-employed. This group consists of people who identify themselves as self-employed and say their business is incorporated. The precentage of incorporated self-employed has trended up over the last decade, going from 3.2% in 1998 to 3.93 in 2008.

Over the next few days we will look at these trends in more detail.

Many thanks to BLS economist Steve Hipple for providing and helping us understand the data. His 2004 article Self- employment in the United States is an excellent reference source on this topic.